Saudia places record order with Airbus

1

WHAT WE’RE TRACKING TODAY

THIS MORNING: Crown Prince postpones Japan trip as King Salman receives medical treatment

Good morning, friends. As we suggested last week would be the case, it’s all aviation, all the time as global industry execs gather at the Future Aviation Forum and two other big industry events. The big headline: Airbus just landed Saudi Arabia’s largest-ever aircraft order.

The conference continues today, and we have the rundown on everything you need to know at the head of this morning’s news well, below. It overlaps with the International Civil Aviation Organization’s Facilitation 2024 Global Summit and with the annual conference of the Airports Council International — also known as WA GA — which runs through Thursday, 23 May.

BUT FIRST- Crown Prince Mohammed bin Salman postponed yesterday a four-day official visitto Japan. A senior Japanese official said at a press conference that the postponement was “due to the health of King Salman,” who is being treated at Jeddah’s Al Salam Royal Palace for inflammation in the lungs. The Crown Prince was due to lead a business delegation to discuss investment and climate tech, as well as gaming and esports.

Other talks with Japan are going ahead as scheduled: The Economic Cities and Special Zones Authority (Ecza) is in Japan as part of the Kingdom’s trade mission, where Ecza officials are pitching Japanese investors on incentives in specialized economic zones in Saudi, Ecza said on X. “Sectors benefiting from tailored support and streamlined access include manufacturing, logistics, and technology,” Ecza said.

AND- The Global Supply Chain Forum gets underway in Barbados today, with Mawani set to participate. The UNCTAD-organized forum, which wraps on Friday, will discuss current and future supply chain challenges. The event will be livestreamed here.

WEATHER- Riyadh’s skies will be sunny with a daytime high of 41°C and a low of 28°C, with similar forecasts for Jeddah with a high of 38°C and a low of 29°C. Makkah might be seeing thunderstorms with a high of 45°C and a low of 31°C.

DATA POINT-

The Kingdom’s e-commerce market is expected to be worth USD 44 bn by 2030, up from USD 21 bn today, economic analyst Mohammed Al Qahtani told Asharq Al Awsat. Al Qahtani sees the sector growing by 13.5% annually, beating a global average of 11.2%, as digital infrastructure and e-commerce are a key pillar of the Kingdom’s diversification efforts.

BACKGROUND- E-commerce is booming: Some 2.6 mn Saudi shoppers make online purchases at least once per day, according to Checkout.com’s State of Digital Commerce in MENA 2024 report. Saudi Arabia is seeing “staggering” growth in online shopping with the number of Saudi consumers shopping online daily growing 90% in the past four years, 10 percentage points above the regional average.

OIL WATCH-

Saudi crude exports hit a nine-month high after exports rose for a second consecutive month in March to 6.4 mn barrels per day (bbl / d), according to Joint Organizations Data Initiative data. However, crude production dipped slightly m-o-m to 8.97 mn bbl / d.

Why this matters: OPEC+ meets on 1 June to decide on whether to extend voluntary oil cuts into the second half of the year. The oil cartel kept earlier this month its forecast for a strong global oil demand this year “broadly unchanged.” It expects oil demand to grow by 2.25 mn bbl / d this year and 1.85 mn bbl / d next year.

WATCH THIS SPACE-

#1- Egypt-born mass transit app Swvl could be expanding its footprint here under an expansion push in the GCC that also includes the UAE, CEO and founder Mostafa Kandil told EnterpriseAM UAE. Kandil discussed the Dubai-headquartered company’s turnaround, its strategy for ensuring profitability, and future expansion plans.

Background: Saudi is currently Swvl’s only operational market outside Egypt, contributing some USD 1.9 mn to the app’s revenues in 2023 to account for 4.55% of its top line, according to the startup’s financials.

#2- Riyadh will be home to the permanent headquarters of the Council of Arab Ministers for Cybersecurity after the Arab League Summit ratified the council’s statute in Manama last week, state news agency SPA reported. Under the regulations, the council will work under the umbrella of the Arab League and will have a secretariat and an executive office in Saudi.

Scope of work: The council will be tasked with outlining policy and strategies to develop joint Arab work in cybersecurity and bolster related initiatives and programs.

#3- Derivative contracts expiring next month will expire on Thursday, 13 June — a week earlier than their previously set expiration date — to account for the Eid Al Adha holiday, Tadawul said in a statement. Tadawul will be closed for Eid Al Adha from Friday, 14 June until Saturday 22 June. Trading on the stock market will resume on Sunday, 23 June.

PSA-

Businesses whose activities are subject to VAT, and that have annual revenues exceeding SAR 40 mn, have until Friday, 31 May to submit their tax returns for April 2024, according to a statement by the Zakat, Tax, and Customs Authority (Zatca). Non-complying businesses will face fines ranging from 5% to 25% of the tax owed.

SPORTS-

You can now book your tickets for the UFC clash between middleweight contenders Robert Whittaker and Khamzat Chimaev in Riyadh’s Kingdom Arena on Saturday, 22 June. The event is the first taking place under a recently extended partnership between Riyadh Season and the UFC. Book your tickets for the inaugural event here.

***
DID YOU KNOW that we also cover Egypt and the UAE?

Were you forwarded this email? Tap or click here to get your own copy of EnterpriseAM Saudi delivered every weekday before 7am Riyadh time — without charge, thanks to our friends at Cenomi.
***

THE BIG STORY ABROAD-

Our corner of the world is the undisputed big story around the world as journalists around the world take stock of the death of Iran’s president and foreign minister, the health of King Salman, and the prospect of arrest warrants for the top leaders of Israel and Hamas.

#1- The International Criminal Court’s chief prosecutor has requested arrest warrants for Israeli Prime Minister Benjamin Netanyahu, his defense minister, and three Hamas leaders on charges of war crimes and crimes against humanity. A panel of ICC judges will decide whether or not to accept the prosecutor’s request.

The US isn’t happy: US President Joe Biden was quick to respond to the news. In a brief statement, he called the move “outrageous.” Meanwhile, US Secretary of State Antony Blinken is warning of the implications of this move, saying that it could jeopardize ongoing efforts to reach a ceasefire agreement.

#2- The death of Iranian President Ibrahim Raisi has opened a conversation on the future of the region’s leadership, writes Bloomberg.

WORTH READING- The AP is out with a piece asking “what’s next for Iran’s government?” Among the questions is who among the hard-liners could step into the presidency.

AND IN TECH NEWS- Microsoft announced its Copilot+ PCs, which it is billing as “the fastest, most intelligent Windows PCs ever built” — designed for AI, of course, as is the flavor of the day. The device will call on AI to perform tasks such as helping users recall things they have come across on their computer. Look for it to be available starting 18 June.

The Wall Street Journal’s Joanna Stern is no shill — and she’s impressed, writing that the device — which she’s had the chance to play with — left her thinking that “Windows is exciting again.” The bottom line: “They’ve got improved performance, battery life and enhanced AI features. Finally. Microsoft is promising some real competition to Apple’s M-powered MacBooks.” The Verge’s Tom Warren has more.

Airbus lands Saudi’s largest aircraft order in its history

Day one of the Future Aviation Forum (FAF) kicked off yesterday, with national flag carrier Saudia landing the Kingdom’s largest-ever aircraft order. The first day of the gathering also saw the General Authority of Civil Aviation (Gaca) launch two reports on the domestic industry, how it plays into the Kingdom’s economic growth strategy, and a roadmap to turn it into a USD 2 bn industry.

REFRESHER- Some 5k executives from aviation majors including Boeing, Airbus, China’s Comac, and Embraer, along with industry experts, manufacturers and government officials are in the capital for talks on industry trends and the signing of agreements on the sidelines of the forum. Over 70 agreements worth USD 12 bn are expected to be signed at FAF, according to state news agency SPA.

Fast figures: The civil aviation sector has contributed USD 53 bn to the Kingdom’s GDP, according to Gaca’s inaugural State of Aviation Report. Some USD 20.8 bn came from aviation related activities, while USD 32.2 bn came from tourism. The full report has not yet been made public.

A LANDMARK SAUDIA BUY-

Saudia has placed an order for 105 narrow-body aircraft from Airbus, which will see it add additional A320neo aircraft to its fleet, Saudia and Airbus said in statements. The order, worth USD 19 bn, is the largest aircraft order in the Kingdom’s history, according to a statement from the forum. Saudia secured the purchase at a reduced price tag, which is usual in the industry, Flyadeal CEO Steven Greenway told Reuters without providing further details. The aircraft will be distributed between the flagship carrier and its low-cost subsidiary Flyadeal, with Saudia set to receive 54 A321neo, while Flyadeal will get 12 A320neo and 39 A321neo.

The rationale: Saudia wants to increase the number of its passengers to 330 mn and expand destinations to 250 by 2030, it said. The target plays into the Tourism Ministry’s goal to lure in 150 mn tourist trips after it hit its target last year ahead of schedule. It also accommodates a target to increase the number of pilgrims to 30 mn by the end of the decade.

What they said: "Saudia has ambitious operational objectives to meet growing demand. We are increasing flights and seat capacity across our existing 100+ destinations on four continents, with plans for further expansion. The progress of Saudi Vision 2030 is attracting more visits, tourists, entrepreneurs, and pilgrims each year,” Saudia Director General Ibrahim Al Omar said.

The landmark order could have been even bigger but Airbus cannot handle any more deliveries before 2032, Saudia spokesman Abdullah Alshahrani told Bloomberg. “We need more than 180 aircraft but there are no slots,” Alshahrani said. “We need the planes now. That’s our demand,” he said. Saudia will begin receiving aircraft from Airbus starting 2026.

By the numbers: Saudia has 144 aircraft in its fleet include 93 Airbus and 51 Boeing aircraft, according to its website. Its subsidiary flyadeal’s entire fleet is Airbuses.

.

Beating Boeing: Saudia signed last year an agreement with US planemaker Boeing for the order of 39 787 Dreamliners with options for ten more aircraft. PIF-owned airline Riyadh Air made a similar order last year with options for an additional 33 aircraft. Riyadh Air was reportedly close to placing a large narrow-body order in November which Bloomberg said involved the Boeing 737 Max planes, but no agreement was closed.

Boeing’s negative press didn’t help: “What happened was the media three weeks later spent every hour of every day writing negative stories about commercial aviation,” Riyadh Air CEO Tony Douglas told Reuters. Political considerations had no bearing on the Boeing agreement being stalled or any other aircraft announcements, Douglas said, telling the newswire that future aircraft purchases will continue to “stay as split [between suppliers] as we can.”

Tried and tested: Flyadeal chose Airbus because it’s familiar with the European planemaker despite delivery delays. “It’s public knowledge there have been constraints and delivery delays for everyone,” he said. “I don't like it.... [but] what can you do?”

REMEMBER- Saudia could soon land in PIF’s portfolio: PIF reportedly in talks to acquire Saudia as soon as next year to add it to its aviation assets portfolio. PIF could take over Saudia’s ownership from the government with the intention of improving its efficiency and net income. It could be either privatized or merged with Riyadh Air — the second flag carrier being set up by PIF.

AND- Saudia will bid adieu to Riyadh by 2030 to make way for Riyadh Air and will instead base itself out of Jeddah’s King Abdulaziz International Airport

ALSO FROM THE FORUM-

Saudi Arabia could be running space tourism trials later this year, Saudi Space Agency CEO Mohammed Al Tamimi said. “Within a window of 60 days from now, there will be an announcement to do some trials here in Saudi Arabia about space tourism,” he said.
Local firm Front End is bringing electronic passenger drones to Saudi by the end of the year under a partnership with Chinese drone maker EHang ;
Saudi and Kuwait agreed to provide perks to each other’s airlines to boost cooperation. No further details were disclosed.

Talco could raise up to SAR 516 mn from its Tadawul IPO

Aluminum products maker Al Taiseer Group Talco Industrial (Talco) is guiding on a price range of SAR 40-43 per share for its IPO on Tadawul’s main market, according to a filing to the exchange. The company is taking a 30% stake to market in a secondary share sale. At the top of the range, the pricing would see it raise up to SAR 516 mn in IPO proceeds, and give it a market cap of up to SAR 1.7 bn post-listing, according to our calculations.

Institutional investors have until this Thursday, 23 May to place their orders, with each able to subscribe to a maximum of 2 mn shares and a minimum of 50k shares, according to the prospectus (pdf). The book-building process for retail investors will run for a two-day period starting Tuesday, 28 May, during which they can subscribe to a maximum of 250k shares and a minimum of 10 shares each. The final share allocation is expected to happen by Sunday, 2 June.

Use of proceeds: Talco’s selling shareholders will take the transaction’s proceeds home after covering transaction related-expenses — estimated at SAR 16 mn. All the proceeds will be divided between the selling shareholders on a pro rata basis.

The pitch: Talco is a leader in the industry, with a footprint in 26 countries across the GCC, MENA region and East Asia, Europe, US, and Australia. Several expansions throughout the years helped bring its aluminum production capacity to 60k MT as of June 2023. It currently operates two factories in Riyadh and one in Jeddah.

ADVISORS- Alinma Investment is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter, while Stat Law Firm is acting as counsel. PwC is Talco’s financial due diligence advisor. Front & Sullivan is serving as market consultant, while KPMG is acting as the company’s auditor. The receiving agents are Alinma Bank, Al Rajhi Bank, and Riyad Bank.

SAUDI IPO PIPELINE AT A GLANCE-

Among the transactions now in the market or in the pipeline:

Fakeeh Care Group has priced its IPO at the top range after strong demand from institutional investors as it looks to become the largest IPO so far this year;
Fintech startup Rasan is set to sell a 30% stake, with subscription period for retail investors kicking-off on Thursday, 29 May;
Labor agency Saudi Manpower Company (Smasco) is selling a 30% stake and has priced the IPO at the top of the range;
Water treatment outfit Miahona has priced its IPO at the top of the range after recording strong investor appetite;
Nupco — a unit of the PIF — has reportedly tapped Rothschild & Co as financial advisor for its potential Tadawul IPO;
Budget airline Flynas is reportedly looking to go public this year;
PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
Hotels and resorts operator Boudl has filed to go public;
Fourth Milling Company will list before the end of June;
Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
Aster DM Healthcare looks set to spin off its GCC assets and seek a dual listing on Tadawul and in the UAE.

SAR 3 bn to be invested in Citic’s industrial city + logistics zone in Saudi

The National Housing Company and Chinese state-owned conglomerate Citic will spend some SAR 3 bn on the first phase of a planned industrial city and logistics zone targeting the building materials industry, NHC CEO Mohammad Albuty told Al Arabiya (watch, runtime: 10:10).

The project will be home to 12 Chinese factories as well as a number of local players. “This will help localize the [building materials] industry and supply for [ongoing] projects by the NHC,” Albaty said. The Housing Ministry’s real estate investment arm, NHC plans to “expand further in the field” to ensure a fast delivery of projects, Albaty said.

Think localization of the whole construction supply chain: Albaty said the NHC is seeking the localization of the construction supply chain at its planned ambitious project with Citic. “It will cover all of the construction supply chain starting with precast concrete to the production of different materials that are used in building residential units. All of these factories will be localized in Saudi … with partnerships planned with local factories to boost their production and customize production lines solely for NHC projects and its developer partners,” he said.

Background: The NHC signed recently a cooperation agreement with Citic to establish an industrial city and logistics zones for building materials. The move comes under a localization drive for the local building materials sector by helping local firms expand and directly supply real estate projects, according to officials. It will also help raise the quality of finish units, officials say.

Riyadh’s office market was tight in 1Q 2024 with 98% occupancy of Grade A offices

Riyadh’s office market was tight in 1Q 2024, buoyed by a 4.4% growth in the non-oil sector, according to Savills’ Riyadh Office Market report (pdf). Grade A offices saw an occupancy rate of 98% during the quarter as demand continues to pick up pace on the back of the Kingdom’s diversification plan and regional headquarters program.

On the office market and foreign interest: New rentals fell 27% q-o-q due to lack of office space availability, with growing demand leading rent prices for Grade A offices to rise 5% q-o-q. Savills said it expects upward pressure on pricing to continue this year thanks to efforts to attract foreign investments and the Kingdom’s regional headquarters program. Nearly 74% of inquiries received by Savills originated from abroad with a notable 37% interest from the US, it said.

Over 180 foreign firms have or are in the process of setting up a regional HQ in Riyadh, beating an initial target of 160 companies, according to Savills. “The city’s expanding market and promising prospects are attracting international companies, reinforcing its position as a vital hub for leading businesses across diverse industries,” Savills said.

Remember: The Kingdom had set a 1 January 2024 deadline for foreign firms to move their regional HQs here or run the risk of losing out on government contracts. The plan, a cornerstone of Crown Prince and Prime Minister Mohammed bin Salman's drive to build a diversified, globally significant non-oil economy, has been in the works since February 2021.

What’s trending in Riyadh: 75% of transactions monitored by Savills saw relocations to business parks in the capital’s northeast and King Abdullah Financial District in northern Riyadh. North-east Riyadh saw the highest rental increase in the first quarter of the year at 36% y-o-y while northern Riyadh came next with a 22% y-o-y rise.

Expect more supply to accommodate the rising demand: Savills sees some 420k sqm of new Grade A office space being added to the market by the end of the year, with the additional supply set to keep the rental market balanced against “sharp” price increases.

Grade A office parks are the next big thing: Earlier this month, Ezdihar Real Estate Development launched a SAR 1.1 bn real estate fund with Al Istithmar Capital — a wholly owned subsidiary of Saudi Investment Bank — to develop a “Grade A office park” in Riyadh. SNB Capital and Alshegrey Investment Group launched in February the SAR 1 bn Al Ahli Al Basateen Real Estate fund. SNB Capital (the investment banking arm of SNB, the Kingdom’s largest bank by assets) and Alshegrey are looking to capitalize on rising demand in Riyadh for offices and commercial real estate.

Gov’t issues new regulations on streamline freelance + flexible work in Saudi Arabia

New regs for freelance and other “flexible” work: The Human Resources and Social Development Ministry has issued new regulations (pdf) to create a legal framework for the freelance and other “flexible” work systems. The new regulations went into effect on Sunday, 19 May; only Saudi nationals can legally engage in freelance work.

In context: This is the latest move in the government’s push to open up to regional and international corporates, while accommodating and streamlining the different contracting systems that are currently gaining traction in the job market. There are currently 35k workers on the system, according to the ministry’s website.

Contracts must be registered on the government’s Marn platform. The regulations also require that contracts mention a specific contracting duration and for employees to be paid an hourly rate. The contracting parties can agree to mention specific working hours in the contract.

Contract duration: The maximum duration of a contract is 12 months — consecutive or not — and if the contracting parties wish to continue working together beyond that duration they have to sign a new contract that expires after 12 months of work.

Working hours + compensation: Workers are allowed to clock in a maximum of 95 hours per month with one employer — half the number of working hours required by the private sector for employees on standard contracts. Workers on the flexible work system can put in a maximum of 160 hours per month with one employer, but will have to be paid for overtime. Overtime payment can be in the same hourly amount mentioned in the initial contract. Workers have the freedom to accept or decline to work during hours that are different from the ones specified in the contract.

This counts towards the company Nitaqat points: Companies with a minimum of 160 hours of work registered by any number of employees under this system will be able to receive Nitaqat points. However, a maximum of 20% of the Saudi employees working at a specific employer can be accounted for in the employer’s Saudization points.

Uh, Enterprise, what is Nitaqat? Nitaqat, introduced in 2011, is a Saudization program managed by the Human Resources and Social Development Ministry and aims at boosting the number of Saudi citizens in the private sector and narrowing the employment gap between the public and private sectors. The program rewards companies that are actively hiring Saudis through by making it easier to hire and retain foreign employees.

Local SaaS startup Merit raises USD 12 mn in a Series B funding round

Merit — an engagement and loyalty SaaS provider — closed a USD 12 mn pre-series B round, showing strong investor appetite as the company had initially aimed to raise USD 5 mn, according to a press release. Saudi Investment Bank’s wholly-owned subsidiary Alistithmar Capital i-Cap led the round with follow-on investments from Tech Invest Com and Hambro Perks Oryx Fund. Information about the structure of the investment and how much equity the investors will get in return wasn’t disclosed.

This round is more than double the size of its series A: The tech company raised USD 5 mn in a series A round in 2021 from Riyadh-based VC fund Impact46 along with Tech Invest Com, Arzan VC, Hambro Perks Oryx and some unnamed regional angel investors.

The funds will be used to develop the company’s tech stack, the statement reads, without providing further information. The tech company offers five distinctive products to engage, reward and gift customers, employees, and friends. The products cater to B2B and B2C businesses alike.

What’s Merit? Founded in 2016 by Julie Barbier-Leblan (LinkedIn) and Thrishan Padayachi (LinkedIn), the startup has global operations in over 160 countries and has partnerships with more than 6k brands, according to their website. Merit was initially headquartered in Dubai, but moved to Riyadh in March 2023, and has offices in Kuwait, Egypt, UK, and Jordan.

IPO-bound Miahona says its net income was up nearly 14% in FY 2023

Miahona’s net income rose 13.6% y-o-y to SAR 56.9 mn in FY 2023, the Riyadh-based water treatment company said in a post on X. The growth in net income came on the back of improved gross profit margins and higher revenues from customer contracts, mainly water and wastewater services contracts, according to Argaam. Revenues grew 17.6% y-o-y to SAR 324.5 mn over the same period.

Miahona is IPOing based on the 3Q 2023 figures that back its prospectus (pdf).

Just as Miahona gears up for listing: The sole owner of Miahona — Vision Invest — will offload a 30% stake on main market Tadawul in a secondary share sale. The IPO of the water treatment outfit was priced top of the range at SAR 11.50 per share, valuing the IPO at just SAR 555.5 mn after strong demand from institutional investors. Miahona will make its market debut with a market cap of SAR 1.85 bn. The two-day subscription process for the retail tranche is slated to start today.

ADVISORS- Our friends at EFG Hermes KSA are quarterbacking the transaction as financial advisor, bookrunner, and underwriter, along with Saudi Fransi Capital (SFC) which is also separately acting as the lead manager. SFC and Riyad Bank are receiving agents. Latham & Watkins is acting as legal counsel, while PwC is financial due diligence advisor, KPMG are serving as auditors, and Arthur D. Little as market consultant.

It’s all about Saudia in the foreign press

It’s a mixed bag for Saudi in the foreign press today, with Saudia’s historic narrow-body aircraft order from Airbus and a rock band making the rounds. Saudia’s announcement — which we cover in this morning’s news well, above, is getting ink from Bloomberg | Reuters | Associated Press | AFP | CNN | The Telegraph.

Meanwhile, a recent performance by a local all-women psychedelic rock band in Riyadh got ink from the Associated Press. Seera’s music style is inspired by life experiences of its four members using the local dialect. “We didn’t know how people would react,” Meesh, the Seera band’s bassist, said. “We believe strongly in self-expression. To our surprise, they really had open arms for us.”

Retal unit lands SAR 2.9 bn contract with PIF-owned Roshn. Plus: M&A, debt and logistics

REAL ESTATE-

#1- Building Construction (BCC) — a subsidiary of Tadawul-listed real estate developer Retal Urban Development — has landed a SAR 2.9 bn contract for Dhahran’s first multi-use community complex with PIF-owned Roshn Group, the parent company said in a disclosure to Tadawul. The 45-month agreement will see BCC design, build and develop some 1.9k residential units at Roshn’s Aldanah project Site 1, in addition to carrying out some infrastructure and landscape work and developing public amenities.

About the project: Aldanah project, which spans 1.7 mn sqm, will be home to 10k residents. The complex’s units will be equipped with advanced energy-saving features, including modern insulation, solar water heaters and high efficiency air conditioning. Green spaces will cover 10% of the project’s total area. Aldanah is Roshn’s sixth mixed-use development across the Kingdom.

#2- Nomu-listed View United Real Estate Development signed an MoU with Zamil Group Real Estate to cooperate on joint real estate investment and development projects for a renewable one-year period, it said in a disclosure to Tadawul.

DEBT WATCH-

#1-Alkhorayef Water and Power Technologies (AWPT) has increased its Shariah-compliant credit facility with Al Rajhi Bank to SAR 865 mn from a previous SAR 200.9 mn, it said in a disclosure to Tadawul. It said the value of the collateral provided for the financing was amended accordingly to SAR 910.9 mn, while the initial agreement’s terms and conditions were kept unchanged.

Background: AWPT had originally lined up the loan from Al Rajhi Bank back in June 2022 to finance water projects in Dammam, according to an earlier disclosure.

#2- Nomu-listed WSM for Information Technology obtained a SAR 4 mn financing facility under the Ofuq product of the Social Development Bank, it said in a disclosure to Tadawul. The facility is earmarked for funding the tech company’s capital investments, and it will run for a period of 2 years.

Ofuq is tailored for companies that have been in business for a minimum of three years with annual sales between SAR 3 mn and SAR 40 mn.

M&A WATCH-

#1- Saudi Lime Industries closed a SAR 35 mn full takeover of Astra Mining Limited, it said in a filing to the exchange. The Nomu-listed company will also settle SAR 130 mn in debts owed by Astra to local lenders as part of the acquisition, bringing the total amount of the transaction to SAR 164.6 mn. The transaction was financed by the company’s own resources, along with debt facilities, the statement reads, without providing further information.

#2- Home furnishing manufacturer Naseej International Trading has tapped WasatahCapital as its financial advisor for the acquisition of real estate developer Etmam Arabia, it said in a disclosure to Tadawul. The move comes a few months after Naseej signed a non-binding MoU to acquire 100% of Etmam Arabia through a stock swap that will see Naseej issue new shares for the acquisition.

FINANCE-

Monsha’at — the small and medium enterprises regulator — signed a number of financing agreements to support SMEs as part of its Funding Week, it said in a statement. No financial information was provided on these agreements, which include:

An agreement with the Sama-affiliated Saudi Banks Media and Awareness Committee to raise SMEs financial awareness;
An agreement with Janaa Financial to determine SMEs investment needs and challenges;
An agreement with Intelligence Solutions for Digital Brokerage in Finance (Arib) to provide financial brokerage services;
Brought on Smart Interaction Digital Brokerage (Sidb) to offer financing windows through Monsha’at’s Mazaya platform.

TECHNOLOGY-

Aramco is partnering up with French quantum computer startup Pasqal to install Saudi’s first quantum computer in the second half of 2025, according to a joint statement. Under an agreement, Pasqal will install, maintain, and operate a 200-qubit computer for the oil giant. Upon its deployment in 2025, the quantum computer will use the “analog mode” before an upgrade the next year to a state-of-the art hybrid “analog-digital mode” which solves more complex problems seamlessly. Aramco and Pasqal also plan to set up a quantitative research center to promote breakthroughs in quantum algorithm development and identify new use cases for the technology.

SMART POLICY- Quantum computing can have a key role in the development of cleaner fuels through the deployment of its algorithms to optimize energy markets by evaluating significant amounts of data, including energy demand, supply capacity and others.

Aramco and Pascal are no strangers: They signed an MoU in 2022 to “collaborate on quantum computing capabilities and applications in the energy sector” with Aramco-backed VC fund Wa'ed Ventures investing in Pasqal’s USD 108 mn Series B funding round in 2023. The French startup also set up an office in Saudi last year.

Top US official voices opposition to global wealth tax

The US stands opposed to a global wealth tax: US Treasury Secretary Janet Yellen has made it clear that the US will not be backing a unified global wealth tax during upcoming G7 ministerial discussions, she told the Wall Street Journal.

There’s a case to be made in favor of such a tax: Officials from Brazil, France, Spain, Germany, and South Africa have been mulling a proposal that would require bn’aires to part with at least 2% of their overall wealth annually, arguing that a global tax would prevent the super-wealthy from shifting their assets to overseas tax havens and help address the widening income inequality.

Yellen thinks otherwise: “We believe in progressive taxation. But the notion of some common global arrangement for taxing bn’aires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to,” Yellen said.

Where the US currently stands: While the US already taxes its citizens on the global income they earn — which hampers efforts to avoid taxation by moving assets abroad — the concept of an annual tax on an individual’s net worth remains off the table. Meanwhile, the Supreme Court is expected to soon address the constitutionality of wealth taxes — its decision could significantly impact future tax policy in the country.

AND- We’re nearing the end of an era at JPMorgan as Jamie Dimon, 68, “signaled retirement is closer than ever, striking a key change in messaging during the bank’s investor day. “The timetable isn’t five years anymore,” he said, per CNBC.

And for our fellow Finance Bros of a Certain Age™: Ivan Boesky has died at age 87. The American trader came to personify the excesses of arbitrage and insider trade in the 1980s, ultimately pleading guilty to conspiracy charges that signaled the unraveling of the “greed is good” era on Wall Street. Boesky became famous for paying massive sums for inside information that allowed him to structure trades. His case prompted the US securities regulator to properly define insider trading for the first time.

Fast fact: A commencement speech on the power of greed that Boesky delivered became the inspiration for the “greed is good” like attributed to the character Gordon Gecko in Oliver Stone’s Wall Street.

See obituaries in the Financial Times | New York Times | Wall Street Journal.

MARKETS THIS MORNING-

Wall Street cheered Microsoft’s new “AI” PC line, sending the tech-heavy Nasdaq to a record high yesterday, but Asian markets are nonplussed, with all but the Nikkei down in early trading this morning. European and US equities futures were down slightly overnight.

TASI	12,125	-0.6% (YTD: +1.3%)
MSCI Tadawul 30	1,515	-0.9% (YTD:-2.3%)
NomuC	27,036	-0.1% (YTD: +10.2%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	27,229	-0.3% (YTD: +9.4%)
ADX	9,038	- (YTD: -5.6%)
DFM	4,067	- (YTD: -0.2%)
S&P 500	5,308	+0.1% (YTD: +11.3%)
FTSE 100	8,424	+0.1% (YTD: +8.9%)
Euro Stoxx 50	5,074	+0.2% (YTD: +12.2%)
Brent crude	USD 83.71	-0.3%
Natural gas (Nymex)	USD 2.74	-0.4%
Gold	USD 2,433	-0.2%
BTC	USD 69,801	+5.2% (YTD: +66%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.6% yesterday on turnover of SAR 6.1 bn. The index is up 1.3% YTD.

In the green: Al Baha (+7.7%), Amak (+7.1%) and Medgulf (+6.7%).

In the red: Cenomi Retail (-8%), Al Babtain (-7.4%) and Sharqiyah Dev (-4.5%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 31 mn. The index is up 10.2% YTD.

In the green: Future Care (+11.1%), Pro Medex (+8.4%) and Osool and Bakheet (+4.5%).

In the red: Leen Alkhair (-7.7%), Al Muneef (-7.7%) and Riyadh Steel (-6.3%)

CORPORATE ACTIONS-

#1- The shareholders of Tadawul-listed Al Hassan Ghazi Ibrahim Shaker approved a 15% capital increase to SAR 555 mn through a bonus share issuance in a bid to shore up the company’s financial position and support its pipeline investments, according to a statement to Tadawul (pdf).

#2- SAL Saudi Logistics Services approved the distribution of SAR 140.8 mn in dividends for 1Q 2024 at SAR 1.8 per share, according to a statement on Tadawul. Eligible shareholders can cashout within 15 working days from the 26 May eligibility date.

Crown Prince extends condolences to Iran’s interim president after Ebrahim Raisi’s death

#1- Crown Prince and Prime Minister Mohammed bin Salman sent his condolences to Iran’s interim president Mohammad Mokhber over the death of Iranian President Ebrahim Raisi in a deadly helicopter crash, state news agency SPA reported yesterday. Meanwhile, Foreign Minister Prince Faisal bin Farhan phoned in Iran’s acting FM Ali Bagheri Kani to extend his condolences, according to SPA. Kani was named acting FM by the Iranian cabinet following the death of FM Hossein Amirabdollahian.

#2- Finance Minister Mohamed Al Jadaan discussed boosting investment, trade and finance cooperation with his Chinese counterpart Lan Fo’an during a visit to Beijing, according to a post on X. He also co-chaired a meeting of the financial sub-committee under the high-level Chinese-Saudi joint committee. Al Jadaan also met separately with China Securities Regulatory Commission Chairman Wu Qing.

CALENDAR

MAY

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh.

20-21 May (Monday-Tuesday): Future Projects Forum, Four Seasons Hotel, Riyadh.

20-22 May (Monday-Wednesday): Future Aviation Forum, Riyadh.

21-23 May (Tuesday-Thursday): The Saudi Food Show, Riyadh.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh.

25 May (Saturday): Bidding deadline for Duba’s seawater reverse osmosis desalination plant in Tabuk.

26-27 May (Sunday-Monday): Bookbuilding for retail investors in Smasco IPO.

27-28 May (Monday-Tuesday): Smart Data & AI Summit Saudi, JW Marriott Hotel, Riyadh.

29 May (Wednesday): Sanabil 500 MENA seed accelerator demo day, Four Seasons Hotel, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

1 June (Saturday): OPEC+ meeting.

2-3 June (Sunday-Monday): Global Project Management Forum, Riyadh.

4-7 June (Tuesday-Friday): Saudi Sports Show, Riyadh.

4-7 June (Tuesday-Friday): Aqarat Expo, Riyadh.

5 June (Wednesday): World Environment Day.

5 June (Wednesday): The Optimism Forum, Cairo, Egypt.

5 June (Wednesday): Digital Transformation Summit, Riyadh.

14-22 June (Friday-Saturday): Banks and capital markets closed for Eid Al Adha holiday.

AUGUST

12-15 August (Monday-Thursday): The Saudi Food Expo, Riyadh

SEPTEMBER

10-12 September (Tuesday-Thursday): Global AI Summit, Riyadh.

11-12 September (Wednesday-Thursday): The Saudi Event Show, Riyadh.

17-19 September (Tuesday-Thursday): EV Auto Show, Riyadh.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam.

24-26 September (Tuesday-Thursday) Saudi Infrastructure Expo, Riyadh International Convention and Exhibition Center, Riyadh.

23 September (Monday): National Day (national holiday).

OCTOBER

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh.

31 October (Thursday): No-visa travel for Saudis to Montenegro on charter flights expires.

NOVEMBER

2-9 November (Saturday- Saturday): WTA Finals, Riyadh.

26-28 November (Tuesday-Thursday): Saudi Electricity Expo, Riyadh.

11-14 November (Monday-Thursday): Cityscape Global, Riyadh.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Dammam.

25-27 November (Monday-Wednesday): World Investment Conference, Riyadh.

26-28 November (Tuesday-Thursday): Saudi Electricity Expo, Riyadh.

DECEMBER

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification, Riyadh.

11 December (Wednesday): FIFA Congress, which will decide the hosting countries for the FIFA World Cup 2030 and 2034

Signposted to happen sometime in 2024:

The AFC Champions League Elite

2025

FEBRUARY 2024

10-13 February (Monday-Thursday): Leap 2025, the Kingdom’s premier tech investment conference.

Sections

About

Privacy & Support

Get EnterpriseAM daily